Bias: The AUD/FJD is bullish-to-range-bound, as it is currently above the 90-day average and within the upper half of the 3-month range.
Key drivers:
- Rate gap: The Reserve Bank of Australia's indications of potential interest rate hikes could strengthen the Australian dollar relative to the Fijian dollar, which is currently stable.
- Risk/commodities: Recent drops in demand for Australian exports due to disappointing Chinese inflation have pressured the AUD, potentially impacting its strength against the FJD.
- One macro factor: The upcoming release of Australia's Consumer Price Index is highly anticipated, as it may provide insights into inflation trends and influence AUD value.
Range: Expect the AUD/FJD to hold its current position, drifting within the recent range without significant breaks in either direction.
What could change it:
- Upside risk: A surprising rise in Australian export demand could boost the AUD.
- Downside risk: A further slowdown in China's economy could weaken the AUD, pressuring the exchange rate against the FJD.